SaaS Quick Ratio

Tips for calculating, tracking, and distributing your SaaS Quick Ratio.

Start Tracking Your Quick Ratio

Description

The SaaS Quick Ratio is intended to measure the efficiency of growth for a SaaS company. The ratio is made up of different Monthly Recurring Revenue Metrics (more below). The higher your quick ratio, the more efficient the growth.

Quick Ratio = (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR)

 

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How to Calculate Your Quick Ratio in Visible

To track your Quick Ratio in Visible you will need to start with the MRR metrics above. To learn how you can automatically track your MRR metrics in Visible check out this article.

Once you have your MRR metrics in Visible you will be able to create the Quick Ratio using our formula builder. Check out an example of the Quick Ratio Formula to the right:

"Greater Quick Ratios are always better. It’s important to be mindful of the underlying churn rates in a business when evaluating your company based on its Quick Ratio. High growth rates can mask high dollar churn rates."

Tomasz Tunguz - Redpoint Ventures